Jan. 2, 2024

Public Policy Legal Institute:

            The Public Policy Legal Institute (PPLI) is a tax-exempt IRC § 501(c)(3) charitable organization dedicated to the education of the public and government officials on the rights of Americans, individually or in association with others, to advocate for or against governmental public policies. PPLI monitors, analyzes, educates about, and defends, Americans’ First Amendment rights to speak, associate and petition the government. PPLI is an all-volunteer organization.

Vox PPLI and Other PPLI Activities in 2023:

            Over the prior 12 months, PPLI has published more than 96,000 words of news, analysis and legal commentary, mainly through its “Vox PPLI” website and blog: PublicPolicyLegal.com. PPLI publications, like its activities, are non-partisan, largely focused on legal issues, and written for those who are involved in tax-exempt organizations, political and lobbying law, and other public policy advocacy activities. Although its publications are overwhelmingly supportive of First Amendment-protected activities, PPLI strives to provide objective and even-handed commentary.

Vox PPLI has published 12 monthly summaries of “Public Policy Advocacy Highlights,” covering 249 specific topics and posts, and four special reports, totaling some 72,000 words. PPLI articles and reports have been shared on Facebook, Twitter/X, Reddit, LinkedIn, and Pinterest. The most read PPLI publication of the prior year, with thousands of views (some of which came from federal offices), was Vox PPLI’s special report following John “Jack” Smith’s appointment as Special Prosecutor for former President Donald Trump, which described Smith’s past activities at the U.S. Department of Justice that may have triggered the 2010-13 Lois Lerner-led “IRS Targeting Scandal.” The most popular time to access Vox PPLI was Tuesday (22% of all views) at 4PM (10% of all views); this may reflect the fact that many discussions at the monthly First Tuesday Lunch Group meetings were triggered by Vox PPLI articles (the First Tuesday Lunch Group is an informal, nonpartisan, nationwide discussion group of tax and election law practitioners; PPLI is independent of FTLG).

In addition, in September 2023, at the request of the U.S. House of Representatives’ Committee on Ways & Means, PPLI submitted 61 pages, totaling more than 24,000 words, of responses to the Committee’s questions about the Internal Revenue Code, the Internal Revenue Service, and the activities of tax-exempt organizations. In addition to responding to the Committee’s questions, PPLI submitted additional introductory commentary on the importance of maintaining taxpayer confidence that the tax system is politically-neutral and on the continued applicability of First Amendment limits on the Committee’s ability to craft legislation affecting tax-exempt organizations.

Unlike in prior years, PPLI itself did not file any amicus curiae briefs in federal or other courts in 2023. A major portion of its 2023 commentary, however, was focused on litigation alleging federal and state government censorship of social media and other activities of tax-exempt organizations. As of January 2024, the Supreme Court of the United States has accepted review of several cases involving these allegations, including Murthy v. Missouri, No. 23-411, and NRA v. Vullo, No. 22-842, with oral arguments likely in March 2024 and decisions expected before July 2024.

All materials are available free of charge on PPLI’s Vox PPLI website.

Changes Anticipated In 2024:

            PPLI is always evolving. Vox PPLI’s current “monthly highlights” review focus began in January 2022 as a published version of topics for discussion at the First Tuesday Lunch Group meetings; for the five prior years, PPLI used the more common blog format of posting individual topics as appropriate. Producing the thousands of words required for the monthly format is a significant burden on our volunteer staff. As part of PPLI’s review of its 2023 activities and publications, PPLI used an outside statistical analysis of viewership and forwarding of its publications as a basis for comparing the relative value of the two formats. Although not a perfect correlation, the adoption of the much longer-format Vox PPLI monthly highlights appears to have had two results which we interpret as reducing value of the monthly version: reader interest declines markedly with the length of the monthly review (meaning readers don’t always read through the entire post even though some important articles are towards the end of the post), and readership as a whole, though generally much higher than before 2022, has declined as recent monthly highlight reviews lengthened.

            So, we have decided to end the monthly highlights format and return to our format of individual periodic postings on important topics. We welcome your comments on our format, content or other matters. Please submit comments or proposed postings to PublicPolicyLegal@gmail.com or you can use the Contact Us form on Vox PPLI.

Can you believe this picture of Trump being arrested??!! Check out Elliot Higgins’ March 23 completely-fake AI-generated pictures on Twitter of Donald Trump being arrested. You have to look pretty hard to find the structural errors that give away the inauthenticity in Elliot Higgins’ fully-disclosed photo-doodling (spoiler: check out Trump’s supposed belt).

Both of our long-time readers (just kidding) know that we have been downplaying whether Artificial Intelligence will have such a big impact on public policy advocacy, at least in the hands of amateurs or in the short run. But an article in PC Magazine has a different view in its coverage of the first year of ground-breaking AI program ChatGPT. So, we’re not there yet, but “deep fakes” are cruising closer and closer to public policy advocacy significance.

Credit: Elliot Higgins, Twitter, Mar. 23, 2023:

This month’s AI-generated cover image comes from the breathless Politico article, “How a billionaire-backed network of AI advisers took over Washington,” discussed below under GENERAL. This totally-neutral, not-at-all creepy image was generated by Microsoft’s beta AI version of Designer with the prompt: “Image of Open AI experts placed in government agencies to help educate them about the effects of AI.” As always, all comments, including imagery, are from PPLI President Barnaby Zall, and may not represent the views of PPLI, the host of this blog.

GOVERNMENT CENSORSHIP OF ALLEGED “DISINFORMATION:”

Supreme Court Grants Certiorari in Missouri v. Biden, “Terminates” Stay of Fifth Circuit Injunction: On October 20, while many Americans were watching one of the more interesting baseball playoff games in recent memory, the Supreme Court of the United States agreed to review Missouri v. Biden, (5th Cir., No. 23-30445, September 8, 2023), a similarly-complicated and fast-moving case over what two lower courts had found to be a vast federal government effort to censor social media posts that government officials considered to be “misinformation:”

For the last few years—at least since the 2020 presidential transition—a group of federal officials has been in regular contact with nearly every major American social-media company about the spread of “misinformation” on their platforms. In their concern, those officials—hailing from the White House, the CDC, the FBI, and a few other agencies—urged the platforms to remove disfavored content and accounts from their sites. And, the platforms seemingly complied. They gave the officials access to an expedited reporting system, downgraded or removed flagged posts, and deplatformed users. The platforms also changed their internal policies to capture more flagged content and sent steady reports on their moderation activities to the officials. That went on through the COVID-19 pandemic, the 2022 congressional election, and continues to this day.

Enter this lawsuit. The Plaintiffs—three doctors, a news website, a healthcare activist, and two states—had posts and stories removed or downgraded by the platforms. Their content touched on a host of divisive topics like the COVID-19 lab-leak theory, pandemic lockdowns, vaccine side effects, election fraud, and the Hunter Biden laptop story. The Plaintiffs maintain that although the platforms stifled their speech, the government officials were the ones pulling the strings—they “coerced, threatened, and pressured [the] social-media platforms to censor [them]” through private communications and legal threats. So, they sued the officials for First Amendment violations and asked the district court to enjoin the officials’ conduct. In response, the officials argued that they only “sought to mitigate the hazards of online misinformation” by “calling attention to content” that violated the “platforms’ policies,” a form of permissible government speech.

Slip op., at 2-3. 

Like this case, the Supreme Court’s decision yesterday was itself fast-moving, complicated and controversial: not content with simply granting the federal defendants’ request to review the case, the Court also voted 6-3 to terminate the lower court’s injunction against further coercion and censorship while it considers the merits of the case. The decision to release the lower court’s injunction against censorship, as is customary with emergency orders, was not explained. 

Justice Alito, along with Justices Thomas and Gorsuch, dissented from releasing the injunction, asserting that the government’s coercion should not be allowed to continue through the Court’s lengthy review process: 

This case concerns what two lower courts found to be a “coordinated campaign” by high-level federal officials to suppress the expression of disfavored views on important public issues. Missouri v. Biden, ___ F. 4th ___, ___, 2023 WL 6425697, *27 (CA5, Oct. 3, 2023). To prevent the continuation of this campaign, these officials were enjoined from either “coerc[ing]” social media companies to engage in such censorship or “active[ly] control[ling]” those companies’ decisions about the content posted on their platforms. Id., at *7, *15. Today, however, a majority of the Court, without undertaking a full review of the record and without any explanation, suspends the effect of that injunction until the Court completes its review of this case, an event that may not occur until late in the spring of next year. Government censorship of private speech is antithetical to our democratic form of government, and therefore today’s decision is highly disturbing. …

At this time in the history of our country, what the Court has done, I fear, will be seen by some as giving the Government a green light to use heavy-handed tactics to skew the presentation of views on the medium that increasingly dominates the dissemination of news. That is most unfortunate.

Slip op., at 1-2, 5.  

The Court majority’s caution about interfering with government activity may have stemmed more from the wide scope of the litigation over the federal censorship effort, as shown by the tens of thousands of pages of evidence and argument already in the case, than from agreement on the merits of supporting government censorship. The Court’s general impulse in such emergency cases, which appear before the lower courts have full trials on the evidence, is to preserve the status quo; that often means that the Court will uphold injunctions. Here, however, where it is difficult to get a handle on the clash of the case’s powerful legal questions, that same impulse may have caused the Justices to defer to the federal government’s arguments about its urgent needs. Thus, the Court’s termination of the injunction does not indicate that the federal government will prevail after the Court hears full briefing and argument, probably by early next year. The prospect of a Court decision, either way, dropping into what is an already-complex election year may goad the Court into acting more quickly than usual. In any event, the Court almost always completes its review of even such complicated and sweeping cases by the end of June of each year.   

Because the Court’s grant of certiorari took the case off the “emergency docket,” the Court gave it a new name and case number: Murthy v. Missouri, No. 23-411. President Biden, who was named in the original complaint, was not bound by the lower courts’ injunction against censorship, leaving U.S. Surgeon General Vivek Murthy as the signature Petitioner in the Court’s review. 

Media coverage was immediate, though generally focused on the politics, not the legal issues, of the Court’s decision. UCLA Law Prof. Eugene Volokh has a legal summary with quotes from the Solicitor General’s plea to the Court, as does Amy Howe of SCotUSblog. General media: CNN; New York Times; Washington Post; Courthouse News Service.  

Supreme Court Also Grants Cert In NRA v. Vullo, No. 22-842, Which Asks Same Coercion vs. Convincing Question On The State Level: After holding onto the Petition for Certiorari (review of a case) in Nat’l Rifle Assoc. v. Vullo, No. 22-842 for weeks, the Supreme Court today granted cert. The grant was limited to Question 1 in the Petition, which now reads:

QUESTION PRESENTED:

Bantam Books v. Sullivan held that a state commission with no formal regulatory power violated the First Amendment when it “deliberately set out to achieve the suppression of publications” through “informal sanctions,” including the “threat of invoking legal sanctions and other means of coercion, persuasion, and intimidation.” 372 U.S. 58, 66-67 (1963). Respondent here, wielding enormous regulatory power as the head of New York’s Department of Financial Services (“DFS”), applied similar pressure tactics – including backchannel threats, ominous guidance letters, and selective enforcement of regulatory infractions – to induce banks and insurance companies to avoid doing business with Petitioner, a gun rights advocacy group. App. 199-200 ¶ 21. Respondent targeted Petitioner explicitly based on its Second Amendment advocacy, which DFS’s official regulatory guidance deemed a “reputational risk” to any financial institution serving the NRA. Id. at 199, n.16. The Second Circuit held such conduct permissible as a matter of law, reasoning that “this age of enhanced corporate social responsibility” justifies regulatory concern about “general backlash” against a customer’s political speech. Id. at 29-30. Accordingly, the questions presented are:

1. Does the First Amendment allow a government regulator to threaten regulated entities with adverse regulatory actions if they do business with a controversial speaker, as a consequence of (a) the government’s own hostility to the speaker’s viewpoint or (b) a perceived “general backlash” against the speaker’s advocacy?

The exclusion of Question 2, which read: “Does such coercion violate a clearly established First Amendment right?”, may have been viewed as dealing only with Respondent Vullo’s contention that she could claim “qualified immunity” (i.e., couldn’t be found liable unless she violated a clearly-established constitutional right) as a government official. The case will be a battle between legal heavyweight lawyers: Vullo’s Counsel of Record in the Supreme Court, Trevor Morrison, Con. Law Professor and former Dean at NYU Law, Ginsburg clerk and White House associate Counsel, may have thought more of that defense than Petitioner’s Counsel Eugene Volokh, UCLA Con. Law Professor, former O’Connor clerk and leader of the well-known libertarian blog The Volokh Conspiracy. 

Another possible related reason for limiting the Question to the First Amendment is that this is the second case the Court has granted on essentially the same question; the other case is No. 23-411, now known as Murthy v. Missouri, which also asks whether government officials can censor expression indirectly by going after a speaker’s essential infrastructure. In Vullo, the New York government official went after the NRA’s bankers and insurers, telling them they would suffer “reputational risk” by being associated with the NRA, and threatening them with regulatory sanctions; in Murthy, the federal officials “jawboned” social media companies into downgrading or blocking posts that the government didn’t like. Both cases turn on the question of whether the government was coercing or convincing (persuading) the private companies involved into doing its bidding. By granting cert to Vullo, the Court was likely to gain the participation of both Volokh and Morrison as well as the Missouri and federal attorneys in Murthy. Either way, the Court does often grant related cases just to hear from other sets of counsel. 

The NRA’s opening briefs will be due just before Christmas (roughly two weeks after the Solicitor General’s opening briefs in Murthy are originally due), but since the case won’t actually be heard until next spring, the Court may allow some delays. 

Fifth Circuit Panel Issued New Version of Modified Injunction In Missouri v. Biden, This Time Including CISA, the Switchboard Between Agencies and Private Companies: Note: just to clear up a possible question, we are adding some additional background in what is now Murthy v. Missouri. On October 3, the Fifth Circuit Court of Appeals revised its original rewrite of the lower court’s injunction in Missouri v. Biden, No. 23-30445, to again apply to the Cybersecurity and Infrastructure Security Agency. The original injunction applied to CISA, which the District Court had found coerced social media companies to censor otherwise protected speech, but an earlier Fifth Circuit order removed CISA from the injunction because its activities as a “switchboard” passing messages between alleged participants in the censorship effort were not enough to meet a coercion standard. The newly-revised injunction opinion found that CISA did, in fact, censor free speech and again barred it from doing so.

Knight First Amendment Institute Offers Special Series of Op-Eds on “Jawboning,” From the Insider Perspective: The Knight First Amendment Institute “was established in 2016 by Columbia University and the John S. and James L. Knight Foundation to safeguard free expression in the shifting landscape of the digital age.” It has just published a series of articles about “jawboning” attempts at government censorship, written by industry insiders, academics and activists. Among the more thoughtful are those from:

Daphne Keller, who heads the Program on Platform Regulation at Stanford’s Cyber Policy Center and earlier wrote, for the Hoover Institute, a seminal insightful analysis of jawboning and regulation of social media platform speech:

Governments around the world “jawbone” platforms by pressuring them to take down users’ speech. In the U.S., those pressures can be unconstitutional. The seminal Bantam Books case held that a state “Commission to Encourage Morality in Youth” violated the First Amendment by pressuring bookstores to remove allegedly obscene books from their shelves. More recently, the Fifth Circuit held in Missouri v. Biden that members of the Biden administration had exceeded constitutional bounds in urging platforms to remove misinformation about COVID-19.

State actors are not going to stop talking to platforms, though. We shouldn’t want them to stop. And interjecting courts to mediate every discussion and avoid any risk of prior restraint is not an option. Even Bantam Books itself made clear that state employees need not “renounce all informal contacts” with private speech distributors. The question is what constitutional guardrails should shape these important and unavoidable conversations.

I’ve been speaking and writing about jawboning for half a decade now. I was on the receiving end of jawboning for a decade before that, as a lawyer for Google. I have a lot of thoughts; this post shares six of them. Some are cranky. (Part 1: First Amendment Rules Need to Cover Speech We Like and Also Speech We Don’t Like.) Some push in opposing directions, and make the constitutional questions about jawboning even murkier. (Parts 2 and 3: State Actors Can Violate Users’ First Amendment Rights Without Coercing Platforms and State Actors Should Be Able to Yell at Platforms Without Violating the First Amendment.) One sounds Pollyannaish, but I think it’s a big deal. (Part 4: Transparency from the Government Can Solve a Multitude of Problems.) One is boring but hopefully useful. (Part 5: There Are a Lot of Other Legal Fault Lines, and They are Messy.) The last one goes back to being cranky. (Part 6: Everyone Is Doing It.)

Katie Harbath, a senior advisor for technology and democracy at the International Republican Institute, a nonresident fellow at the Atlantic Council and a fellow at the Bipartisan Policy Center, who is familiar to many who worked in the early days of social media as Facebook’s representative to some political campaigns, and Matt Perault, director of the Center on Technology Policy at UNC-Chapel Hill and another Facebook alumnus:

During our tenure at Facebook, jawboning was incessant. It increased in prevalence as the U.S. government stumbled in its attempts to impose more stringent regulations on the tech sector, despite escalating frustrations with social media generally and Facebook in particular. That gap—between the anger at the industry and the inability to take punitive or preventative action against it—was filled by jawboning. …

… A government official can’t get what they want by passing a law or implementing a rule, so they lean on someone they know—and point and yell or give a serious stare—and threaten retribution by some other means. Jawboning isn’t only about outcomes. It’s also about power and stature. Before 2016, the tech industry was the place that every policymaker wanted to visit to look cool and appeal to younger voters. After 2016, the tech industry was viewed as the destroyers of democracy. We were down. Not popular. And everyone wanted to pile on with criticism. That left us vulnerable to want to take steps to prove we were responsible actors and to be liked again. This could make the amount of jawboning we were getting particularly persuasive.

Almost a decade before Harbath and Perault wrote about it, Keller went into deep and revealing analysis in her earlier work at the Hoover Institution demonstrating the impotence of users who were deeply wronged over many years by the collusion of industry and government.

The story of Facebook taking down the Declaration of Independence illustrates several things about internet platforms and users’ speech rights. The first is platforms’ unprecedented technological capacity to regulate individual expression. Facebook and other large internet companies can monitor every word users share and instantly delete anything they don’t like. No communications medium in human history has ever worked this way.

The second, related point is our ever-increasing dependence on private platforms. …  The Supreme Court has said that platforms like Facebook and YouTube serve as “the modern public square,” providing many people’s “principal sources for knowing current events” and exploring “human thought and knowledge.” …

[W]hile platforms appear to exercise their own discretion when they take down legal speech like the Vindicator’s Declaration of Independence post, their decisions are often profoundly influenced by governments. In some cases, governments’ role is very public. For example, Facebook and other platforms committed, in an agreement with the European Commission, to using their private Community Guidelines to prohibit “hate speech” as defined by the Commission. Platforms also developed automated content filters and high-speed removal processes in order to comply with laws such as Germany’s NetzDG and the EU’s pending Terrorist Content Regulation—despite the serious risk that these automated tools will take down the wrong things.

Governments’ influence on platforms can also be more subtle. As Facebook’s global head of policy has described, companies are “eager to predict regulation . . . so they can adjust their policies to keep up with the times and thereby avoid risk to their business.”  Platforms’ anticipatory obedience spares governments the need to enact actual laws—and deprives affected users of the opportunity to challenge them in court.”

What Keller does not say is just as important: it is not just the efforts of government censorship impulses but the rationale that is important. By harnessing and distorting the long-recognized doctrine of “government speech” (which is basically the idea that government has the right to control its own speech) into a weapon against the First Amendment, the effort to censor social media threatens to make government speech not only the most powerful speaker in the marketplace of ideas, but the only one. See, e.g., Caroline Mala Corbin, Government Speech and First Amendment Capture, 107 Va. L. Rev. Online 224 (Aug. 30, 2021)  https://virginialawreview.org/articles/government-speech-and-first-amendment-capture/. “[T]he government need not be the loudest speaker because it can become the only speaker. First Amendment capture has been made possible by the Supreme Court’s developing government speech doctrine, which holds that government speech is not subject to the Free Speech Clause. Consequently, once speech is declared governmental, the government may censor viewpoints it does not like. First Amendment capture—categorizing contested speech as government speech and then eliminating contrary viewpoints—is an increasingly frequent occurrence and risks giving the government too much power to suppress those who would criticize it or blow the whistle on it.”

Global Cross-Ideological Coalition Issues “Westminster Declaration” To Warn Government Officials That Growing Governmental Censorship Undermines Foundational Principles of Representative Democracy:” Much recent social media and election law rhetoric, including the vast governmental censorship of social media that underlies the Missouri v. Biden/Murthy v. Missouri litigation has attempted to justify government censorship as protection against dangers to democracy. Now some of the censored and those who worry about being censored have offered “The Westminster Declaration,” “to warn of increasing international censorship that threatens to erode centuries-old democratic norms. Coming from the left, right, and centre, we are united by our commitment to universal human rights and freedom of speech, and we are all deeply concerned about attempts to label protected speech as ‘misinformation,’ ‘disinformation,’ and other ill-defined terms. This abuse of these terms has resulted in the censorship of ordinary people, journalists, and dissidents in countries all over the world. Such interference with the right to free speech suppresses valid discussion about matters of urgent public interest, and undermines the foundational principles of representative democracy.”

Although foreign disinformation between states is a real issue, agencies designed to combat these threats, such as the Cybersecurity and Infrastructure Security Agency in the United States, are increasingly being turned inward against the public. Under the guise of preventing harm and protecting truth, speech is being treated as a permitted activity rather than an inalienable right.

We recognize that words can sometimes cause offence, but we reject the idea that hurt feelings and discomfort, even if acute, are grounds for censorship. Open discourse is the central pillar of a free society, and is essential for holding governments accountable, empowering vulnerable groups, and reducing the risk of tyranny.

Speech protections are not just for views we agree with; we must strenuously protect speech for the views that we most strongly oppose. Only in the public square can these views be heard and properly challenged.

What’s more, time and time again, unpopular opinions and ideas have eventually become conventional wisdom. By labelling certain political or scientific positions as ‘misinformation’ or ‘malinformation,’ our societies risk getting stuck in false paradigms that will rob humanity of hard-earned knowledge and obliterate the possibility of gaining new knowledge. Free speech is our best defence against disinformation.

The attack on speech is not just about distorted rules and regulations – it is a crisis of humanity itself. Every equality and justice campaign in history has relied on an open forum to voice dissent. In countless examples, including the abolition of slavery and the civil rights movement, social progress has depended on freedom of expression.

We do not want our children to grow up in a world where they live in fear of speaking their minds. We want them to grow up in a world where their ideas can be expressed, explored and debated openly – a world that the founders of our democracies envisioned when they enshrined free speech into our laws and constitutions.

The US First Amendment is a strong example of how the right to freedom of speech, of the press, and of conscience can be firmly protected under the law. One need not agree with the U.S. on every issue to acknowledge that this is a vital ‘first liberty’ from which all other liberties follow. It is only through free speech that we can denounce violations of our rights and fight for new freedoms.

Not everyone is pleased with the Westminster Declaration. Mike Masnick of The Daily Beast called it a “nonstory.”

We live in the age of self-aggrandizing victimhood. Why take responsibility for your own actions when you can blame outside forces? … I think there is much in the Westminster Declaration that is worth supporting. We’re seeing laws pushed, worldwide, that seek to silence voices on the internet. Global attacks on privacy and speech-enhancing encryption technologies are a legitimate concern. But the Declaration … seeks to take those legitimate concerns and wrap them tightly around a fantasy concoction. … the crux of the Westminster Declaration is an attempt to commingle legitimate concerns about government censorship with grievances about private companies’ moderation decisions. 

Ooops. Alexa Claims 2020 Election Was “Stolen,” Based on Crowdsourced Info: Election Law Blog quotes the Washington Post as noting that Amazon’s ubiquitous smart speaker, etc. system is not immune to social media pressures. “Amid concerns the rise of artificial intelligence will supercharge the spread of misinformation comes a wild fabrication from a more prosaic source: Amazon’s Alexa, which declared that the 2020 presidential election was stolen. Asked about fraud in the race — in which Joe Biden defeated President Donald Trump with 306 electoral college votes — the popular voice assistant said it was “stolen by a massive amount of election fraud,” citing Rumble, a video-streaming service favored by conservatives.” Does this mean that the White House will now start to “jawbone” Alexa?

IRS

“Tax Gap” Increased to $688 Billion in 2021: The “tax gap” is the difference between what American taxpayers should be paying in taxes and what they actually pay. On October 12, the Internal Revenue Service reported that the tax gap was a record $688 billion in 2021. Despite the new record, the American tax system has the highest tax compliance rate in the world, which is largely dependent on taxpayers’ confidence that the system is fair and not corrupt, and federal law zealously protects taxpayer confidentiality to keep the tax gap low. As PPLI, the host of this blog, and the National Taxpayers Union Foundation told the Supreme Court in an amicus brief in Americans for Prosperity Foundation v. Bonta,

Many of the biggest controversies affecting taxpayer confidence involve misuse of the tax system by politicians and elected officials. One of the charges that helped drive President Richard Nixon from office in 1974 was using the Internal Revenue Service (“IRS”) against his “enemies list.” See Impeachment Of Richard M. Nixon, Articles of Impeachment, II(2), H. Rept. 93-1305, at 3 (1974) (“He has, acting personally and through his subordinates and agents, endeavored to obtain from the Internal Revenue Service, in Violation of the constitutional rights of citizens; confidential information contained in income tax returns for purposes not authorized by law, and to cause, in violation of the constitutional rights of citizens, income tax audits or other income tax investigations to be initiated or conducted in a discriminatory manner.”). Those abuses sparked, among other things, tax confidentiality provisions in 26 U.S.C. (“Internal Revenue Code” or “IRC”) § 6103 and the limits in IRC § 6104 on releasing donor information.

IRS Independent Contractor Pleads Guilty to Stealing and Leaking Thousands of Taxpayer Records, Expected To Receive Only Minimal Penalty:  Perhaps coincidentally, the IRS’s announcement of the latest “tax gap” figures did not include any reference to the effect of the enormous leak of the highly-protected taxpayer records from thousands of wealthy Americans that still resonate as ProPublica, a tax-exempt “newsroom” which received some of the leaked records continues to publish breathless articles containing private information protected by law. Charles Littlejohn, of Washington, D.C., an independent contractor to the IRS, pled guilty on October 12 (the same day as the IRS’s tax gap announcement) to stealing those thousands of records and sending them to ProPublica and the New York Times.

Littlejohn could have been charged for each leak, but pled guilty to only one count of illegal disclosure of taxpayer information. He is scheduled to be sentenced in January 2024. He is expected to serve only a few months’ time in custody.

TE/GE FY2024 Work Plan Tied to Rest of Service Priorities: “For the first time in the history of our current compliance structure,” “TE/GE will adapt to view compliance through a Servicewide lens that fully supports the IRS Strategic Operating Plan (SOP) and the agency’s transformation. We are making this shift along with the other business units under the Deputy Commissioner for Services & Enforcement to bring about compliance that is more holistic, smarter, broader and stronger.”

That tangled and buzzword-rich language is how Edward Killen and Robert Choi, the Commissioner and Deputy Commissioner of the Tax Exempt and Government Entities Division of the Internal Revenue Service described their release of the TE/GE Fiscal Year 2024 Workplan. In other words, the non-profit division which regulates First Amendment activity is going to focus on the rest of the IRS’s priorities, which are based on the Sixteenth Amendment, which gives enormous power to collect taxes with little concern over constitutional rights, except as it relates to retaining taxpayer confidence. “We can more readily understand and address the overlap between high-income and high-wealth individuals, exempt organizations, estate and gift tax as we continue collaborative examinations that bring together employees with experience in these different areas.” That’s probably because the IRS got a big surge of money this year, that primarily went to other Service areas in the hope of capturing more taxes that were due but uncollected (the “tax gap”). TE/GE doesn’t collect a lot of taxes compared to the rest of the IRS.

To find out more specifically how TE/GE plans to focus its priorities, turn to the second page of the announcement. There you will find the actual priority plan split into the Service-wide five priorities:

• Better Taxpayer Experience: Focus on small and under-served “stakeholders … to foster voluntary compliance” and on digital communications.
• Faster Issue Resolution:Continue efforts to improve compliance within the exempt sector.
• Smarter Enforcement: Focus expanded enforcement on taxpayers with complex tax filings and high-dollar noncompliance to address the tax gap. Specifically, use “advanced modeling techniques” and “graphical exploration of the connections between entities.”
• Advanced Technology and Analytics: Deliver cutting-edge technology, data, and analytics to operate more effectively.
• Empowered Employees: “Attract, retain, and empower a highly skilled, diverse workforce and develop a culture that is better equipped to deliver results for taxpayers.”

See a pattern here?

IRS Hopes to Hire More Tax Experts, But Will Attrition Counter Any New Hiring? IRS Commissioner Danny Werfel told a congressional committee that the billions of new dollars infused into the Internal Revenue Service will enable the tax agency to overcome the “financial sacrifice” of working for the agency. But attrition among current employees continues at a high rate, reported the Government Accountability Office. So, Werfel noted, the Service won’t know whether its recruitment efforts pay off until next year.

FEC

FEC Adopts Revised Version of New Pre-Investigation Disclosure Provisions For Office of General Counsel: After receiving comments on an earlier proposal, Agenda Document No. 23-21-A (Commissioner Dickerson) to require the Federal Election Commission’s Office of General Counsel to provide the Commissioners with an investigation plan and periodic update reports, the Commission has now adopted a revised version (h/t IFS) from FEC Chair Dara Lindenbaum and Commissioner Shana Broussard that:

• requires that the proposed investigatory plan not be filed until the Respondent has responded to the Reason to Believe finding;
• clarifies that “the identification of new sources of publicly available information” is not an expansion of the scope of the investigation requiring a revised Investigative Plan and tally vote by the Commission,” and,
• moves up the sunset date for the new procedure to June 30, 2025 from the earlier deadline of December 31, 2025.

Commissioners Dickerson and Trainor, who both voted for the revised proposal, submitted a Statement that recounted numerous past incidents in which the OGC made egregious mistakes and commended the Commission for adopting a plan to rein in the rogue agency.

America First Legal Files FEC Complaint Against Democratic and Biden Election Organizations Over Hunter Biden Laptop Letter: A conservative organization has filed a complaint with the Federal Election Commission arguing that Biden-related campaign committee and PACs, along with the Democratic National Committee, “failed to disclose coordinated expenditures constituting in-kind donations with respect to the infamous ‘Letter of 51’ former intelligence officials claiming that the Hunter Biden laptop story had ‘all the classic earmarks’ of Russian disinformation.” The campaign-finance aspect of the claim rests on the claim that: “upon information and belief, Mr. Brennan, Mr. Clapper, and possibly others signed Exhibit 2 with actual knowledge that Exhibit 2 had been obtained and authenticated by the Federal Bureau of Investigation in or about November 2019. Because of their supposedly “nonpartisan” national security and intelligence affiliations, all parties recognized that Exhibit 2 was a campaign contribution of great and substantial value.” Complaint, ¶ 31. And, that supposed contribution was never reported to the FEC. Id, ¶ 32.

CONGRESS

HFAC Holds Hearing on U.S. Interagency Group Funding of Global Engagement Index Blacklist of U.S. Media Sites: The House Foreign Affairs Committee held an October 25, 2023, hearing (h/t IFS) on the Global Engagement Center, a State Department-houses interagency group intended to combat “foreign disinformation” in the U.S. The Washington Examiner reports that much of the discussion at the hearing centered on the GEC’s providing U.S. funds to the Global Engagement Index, which the Examiner notes is “a British think tank feeding blacklists of conservative websites to advertisers to shut down disfavored speech.” When Rep. Darrell Issa asked GEC’s Acting Coordinator Daniel Kimmage whether the New York Post, one of the conservative sites on the GEI blacklist, was a source of disinformation, Kimmage replied: “The Global Engagement Center does not do any work domestically, and we don’t have any position on any U.S. media outlets at all.” The Washington Examiner, also on the GEI blacklist, has been running a series of stories on “Disinformation, Inc.” which is its title for the State Department’s funding of “tracking groups” to “defund disfavored speech.”

House Judiciary and Oversight and Accountability Committees Begin Investigation of D.C. Attorney General’s Subpoenas to Leonard Leo and Tax-Exempt Organizations: Under House Rules, the Committee on Oversight and Accountability has jurisdiction over “Municipal affairs of the District of Columbia in general,” Rule X.1(l)(5) (2023), and the Committee on the Judiciary has jurisdiction over “civil liberties,” Rule X.1(n)(2). So, when Committee Chairs Comer and Jordan send a joint letter to Brian Schwalb, the D.C. Attorney General, citing to the Supreme Court’s decision in Americans for Prosperity Foundation v. Bonta seeking information “about potential infringement on free association and donor privacy,” there might be a defensible basis for at least the inquiry. Interestingly,  Schwalb was a tax attorney in the U.S. Department of Justice’s Tax Division before becoming the D.C. Attorney General, and ought to have some sensitivity to this issue.

In April, the Campaign for Accountability, described by Politico as a “Liberal watchdog group,” filed a complaint with the IRS claiming that tax-exempt organizations related to Leonard Leo, the co-Chair of the Federalist Society, were paying “excessive compensation” to Leo’s for-profit companies. CfA says it can’t figure out what’s going on with all these organizational relationships, and asks IRS to do so. CfA claims violations of private benefit, private inurement, and excess benefit transactions that resulted in the payment of $73 million from 2016-2021, and requests that the IRS investigate. Id., at 17.

According to Politico, Schwalb has opened similar investigations of Leo and several organizations connected with him, as well as of Arabella Advisors, the driving force behind a behemoth progressive funding network. Politico also notes that Leo is apparently resisting Schwalb’s inquiries, with his lawyers noting that the D.C. Attorney General has no jurisdiction over Leo’s organizations, which are domiciled in Virginia or Texas (though this contention doesn’t deal with most Attorneys’ General investigating charitable activities such as fundraising that occur within their territories or to their residents); apparently Arabella is cooperating. The Washington Examiner has a deeper dive.

The Jordan/Comer letter to Schwalb says, in part: “the Committees are troubled that your investigation could infringe upon the fundamental rights of donor privacy and free association. The U.S. Supreme Court has repeatedly affirmed the associational and privacy rights of donors—including the right of Americans to donate anonymously—especially when these rights are threatened by attorneys general who target nonprofit organizations for political reasons.” Lately the Court has been more active against Attorneys General who overstep, but that’s probably a result of more Attorneys General filing suits against federal and other state policies than any predilection of the Court.

COURTS

Tenth Circuit Rules Wyoming Donor Disclosure Requirement Is Unconstitutionally Vague, Citing AFPF v. Bonta: In Wyoming Gun Owners v. Gray, 10^th Cir., Oct. 11, 2023, the U.S. Court of Appeals for the Tenth Circuit ruled that Wyoming’s donor disclosure requirement for electioneering communications (public communications before elections that include names of candidates) was void for vagueness and not narrowly tailored enough to survive constitutional scrutiny. Slip op. at 3. The opinion relied on the Supreme Court’s recent decision in Americans for Prosperity Foundation v. Bonta, which rejected California’s requirement that tax-exempt organizations file their list of donors with the state’s Attorney General. “Bonta thus tightened our review of disclosure laws. See Gessler, 773 F.3d at 220 n.1 (distinguishing a case applying narrow tailoring as “more stringent than the exacting scrutiny we use to evaluate disclosure schemes”). While the government still must demonstrate a substantial relation between a disclosure scheme’s burden and an important governmental interest, it must also show that the regime is “narrowly tailored to the government’s asserted interest.” Bonta, 141 S. Ct. at 2383. The narrow tailoring inquiry directs us to consider “the extent to which the burdens are unnecessary.” Id. at 2385; see also Shelton v. Tucker, 364 U.S. 479, 488 (1960) (“The breadth of legislative abridgment must be viewed in the light of less drastic means for achieving the same basic purpose.”).” Slip op., at 33.

UCLA Law Prof. Rick Hasen noted: “What’s most significant in this decision by Judge Tymkovich for a unanimous 3-judge panel is the determination that Bonta makes it harder to sustain campaign finance disclosure laws (as I said in a NYT oped the day after the Supreme Court issued the decision was a likely consequence of Bonta—and to which I got a lot of pushback).” The real value of WyGO v. Gray is in its analysis of the post-AFPF v. Bonta “narrow tailoring” standard:

“A critical feature of [the narrow tailoring] inquiry turns on whether the [government] ‘seriously undertook to address’ the problems it faces ‘with less intrusive tools readily available to it.’” Sisters for Life, Inc. v. Louisville-Jefferson Cnty., 56 F.4^th 400, 404 (6th Cir. 2022) (Sutton, C.J.) (quoting McCullen v. Coakley, 573 U.S. 464, 494 (2014)). This means that, beyond proving a balanced relationship between the disclosure scheme’s burdens and the government’s interests, the government must “demonstrate its need” for the disclosure regime “in light of any less intrusive alternatives.” Bonta, 141 S. Ct. at 2386. “It is the government’s burden to demonstrate that the challenged law furthers important governmental interests and is narrowly tailored. If the government fails to make that showing, it cannot prevail.” Cornelio v. Connecticut, 32 F.4th 160, 177 (2d Cir. 2022). The government has not demonstrated a special need for the disclosure regime’s unique burdens on WyGO and has failed to justify why it could not use less intrusive tools to further its interests.

Slip op., at 38-39.

Under our heightened standard of review, Wyoming owes its citizens precision. “Precision of regulation must be the touchstone in an area so closely touching our most precious freedoms.” NAACP v. Button, 371 U.S. 415, 438 (1963). A disclosure statute that burdens an advocacy group with muddling through ambiguous statutory text that fails to offer guidance on compliance does not afford that precision. It offers only uncertainty. This uncertainty is particularly problematic in the First Amendment context. “Narrow tailoring is crucial where First Amendment activity is chilled—even if indirectly—‘[b]ecause First Amendment freedoms need breathing space to survive.’” Bonta, 141 S. Ct. at 2384 (quoting Button, 371 U.S. at 433).

Slip op. at 40.

Amicus [Campaign Legal Center] highlights Delaware Strong Families v. Attorney General of Delaware, 793 F.3d 304 (3d Cir. 2015), as an example of a disclosure statute that survived exacting scrutiny despite the absence of a Gaspee Project-style opt-out. The Delaware disclosure law required advocacy shops that spent over $500 issuing an electioneering communication to disclose the names of donors who contributed over $100 during the election cycle. That law surely forced advocacy groups to bear the burden of overdisclosing donors despite a disconnect with an informational interest.

Delaware Strong Families is a relic of pre-Bonta exacting scrutiny. The Third Circuit understood exacting scrutiny to require only that “the strength of the governmental interest . . . reflect[ed] the seriousness of the actual burden on First Amendment rights.” Doe, 561 U.S. at 196 (internal quotation marks omitted). After Bonta, a court would surely take a closer look at the “extent to which the burdens are unnecessary.” 141 S. Ct. at 2385. The Delaware Strong Families Court admittedly invoked the word “tailored” on several occasions, but it seemed to use the word interchangeably with the “substantial relation” language, and nowhere did it require the government to “demonstrate its need” for the disclosure regime’s burden “in light of any less intrusive alternatives.” Id. at 2386.

* * *

In sum, the Wyoming disclosure regime is not narrowly tailored as applied to WyGO. WyGO’s internal-accounting mechanisms are in full compliance with the statute, but WyGO has no way to comply with Wyoming’s reporting requirements without overdisclosing. Demanding that a small advocacy organization accept greater First Amendment burdens to remain in compliance with a “flexible” statute is not narrow tailoring. To comply with the First Amendment, a disclosure regime must offer appropriate and precise guidance, defining how actors—sophisticated or otherwise—should structure internal accounting mechanisms. “The First Amendment does not permit laws that force speakers to retain a campaign finance attorney, conduct demographic marketing research, or seek declaratory rulings before discussing the most salient political issues of our day.” Citizens United, 558 U.S. at 324.

The prevailing plaintiff organization was represented by Del Kolde from the Institute for Free Speech, as well as D.C. constitutional litigator Steve Klein and local counsel Seth “Turtle” Johnson, from the Wyoming firm of Slow & Steady Law Office on the briefs. The Tenth Circuit awarded legal fees to WyGO and remanded the case for assessment of fees.

Surprise! The Most Influential Justice Is … Brett Kavanaugh: The Los Angeles Times carried an extensive analysis of how the Supreme Court Justices group up to decide various cases and found, surprise, surprise, that the Court is basically divided 3-3-3 (as we’ve been discussing since Justice Barrett joined). Within that framework, the Times found that the conservative Justice in the middle of many progressive “wins” in the Supreme Court is Justice Brett Kavanaugh, reviled (wrongly) by many after his highly-charged confirmation ordeal.

DoJ

Social Media “Influencer” Sentenced to Seven Months in Prison For Telling Clinton Supporters They Could Vote By Text: Douglas Mackey, AKA Ricky Vaughn, an internet influencer, was convicted in March for “conspiracy to interfere with potential voters’ right to vote in the 2016” Presidential election, and on October 18, was sentenced to seven months in federal prison. Breon Peace, the U.S. Attorney for the Eastern District of New York said, in a statement, (h/t IFS) that “One of the foundational rights we hold as Americans, a right that many fought so hard to obtain, is the right to vote.  The defendant weaponized disinformation in a dangerous scheme to stop targeted groups, including black and brown people and women, from participating in our democracy. This groundbreaking prosecution demonstrates our commitment to prosecuting those who commit crimes that threaten our democracy and seek to deprive people of their constitutional right to vote.”

Grassley Letter Says More Than 40 Informants Gave Information Related to Biden Family That FBI Claimed Was “Foreign Disinformation:” As if the FBI didn’t have trouble enough, the New York Post (which broke the Hunter Biden laptop story) reports that Sen. Charles Grassley sent a letter to Attorney General Merrick Garland and FBI Director Christopher Wray detailing dozens of confidential informant reports that were mischaracterized by the FBI as “foreign disinformation.” “Based on the information provided to my office over a period of years by multiple credible whistleblowers, there appears to be an effort within the Justice Department and FBI to shut down investigative activity relating to the Biden family. Such decisions point to significant political bias infecting the decision-making of not only the Attorney General and FBI Director, but also line agents and prosecutors. Our Republic cannot survive such a political infection and you have an obligation to this country to clear the air,” Grassley wrote.

STATES

Washington State to Pay $4.3 Million in Legal Fees For Failed Suit Challenging Value Village’s Use of Its Charitable Donation Program As Consumer Fraud: Washington State has an expansive and powerful consumer protection law under which its Attorney General claims brought in $1.3 billion in litigation awards last year alone. The current Attorney General, Bob Ferguson, is running for governor. Value Village, operated by TVI, a for-profit company with more than 300 stores nationwide, highlighted its record of giving more than $580 million to charities in the last five years, which the Washington AG contended would confuse consumers about whether the stores themselves were nonprofits.

Last February, after almost ten years of litigation, the Washington Supreme Court ruled that businesses could not be punished for telling consumers about their programs of charitable donations.  The Court said: “[U]nlike most other for-profit companies, it is impossible for TVI to advertise its business model without engaging in charitable solicitation. We will not force TVI to choose between the First Amendment’s protections for charitable solicitations and the First Amendment right to advertise a lawful business.” Slip op. at 22.

Now, Value Village has been awarded almost $4.3 million in legal fees for the case, and said it would donate $1 million of that to charities. According to the Seattle Times, King County Superior Court Judge David Whedbee said that the State’s case was “needless,” and that the way the Attorney General’s Office handled the case — including ignoring requests by the company’s attorneys to figure out what it was supposedly doing wrong — had drawn out the matter and run up legal costs for the company.

Fifth Circuit Holds Texas Law Prohibiting Using Drones to Video Nonconsenting Persons or Property Does Not Violate the First Amendment: Ten years ago, Texas enacted a ban on using drones to “capture an image” of individuals or private property “with the intent to conduct surveillance on the individual or property captured in the image.” A news photographers group sued, claiming a First Amendment right to video from drones without consent. A panel of the U.S. Court of Appeals for the Fifth Circuit rejected the photographers claim: “Though we do not foreclose any as-applied constitutional defenses to any hypothetical future prosecutions under the drone laws, we hold that these facial challenges fail. … federal law expressly contemplates concurrent non-federal regulation of drones, especially where privacy and critical infrastructure are concerned. … The operation of a drone is not inherently expressive—nor is it expressive to fly a drone 400 feet over a prison, sports venue, or critical infrastructure facility. And nothing in the No-Fly provisions has anything to do with speech or expression. These are flight restrictions, not speech restrictions. … nothing in the Constitution permits an individual to film his neighbor in the privacy of her own home—stealthily from the air—for purposes of conducting ‘surveillance.’ Under Plaintiffs’ novel theory of the First Amendment, laws prohibiting stalking—and even voyeurism—would fall in the name of ‘free speech.’” Slip Op., at 2, 19-20, 37. Courthouse News has background.

GENERAL

UVa Center For Politics Poll Shows Divided America: As if we needed any more evidence of what we see around us, the University of Virginia’s Center for Politics has released a new poll with results that UCLA Law Prof. Rick Hasen called “really troubling findings about democracy and the potential for violence.” Politico’s Playbook summarizes:

New polling from the University of Virginia’s Center for Politics shows an intensely divided country in which partisan rancor has grown so deep that many Americans support authoritarian or unconstitutional proposals. To wit, here’s the percentage of respondents that at least somewhat back radical ideas:

• Exploring alternatives to democracy: 31% of DONALD TRUMP supporters, 24% of Biden supporters.
• Using violence to stop the other side: 41% of Biden supporters, 38% of Trump supporters.
• Suspending elections in times of crisis: 30% of Trump supporters, 25% of Biden supporters.
• Red or blue states seceding from the union: 41% of Trump supporters, 30% of Biden supporters.

There’s lots more in the poll, which also finds Biden leading Trump 52% to 48% in the 2024 horse race. 

Hyperbole Alert – Politico Says “How a billionaire-backed network of AI advisers took over Washington:”  What does it take to “take over Washington?” Apparently just paying for a few “fellows” to help government agencies figure out a difficult new technology. Politico reports on a new “network” attempting to educate government agencies and officials about Artificial Intelligence. And, surprise, surprise, the network is backed by big tech money, most of which is involved in promoting AI, and now there’s a counter move by advocacy organizations which have a different view from big tech money, whose major contribution thus far is to complain that no one listens to them because they don’t have as much money.

Both supporters and critics of the effective-altruist influence on AI policy say Open Philanthropy’s burgeoning network is largely a product of Washington’s acute lack of staffers with tech expertise. “In an ideal world, all the relevant government offices would have permanent in-house staff with critical subject-matter expertise on emerging technologies — which they need in no small part to not be overpowered by corporate lobbying,” said Zwetsloot, Horizon’s co-founder. He said he hoped for a day when fellowship programs like the one run by Horizon “are no longer necessary.” As a counterweight to the growing influence of Open Philanthropy and effective altruists, AI experts who want Washington to focus on a different set of risks are slowly building their own network in the capital.

Here is a totally-neutral, not at all creepy, A.I.-generated image (from Microsoft’s beta version of Designer) of Open AI “fellows” placed in government agencies to help them understand the effects of AI):